Royal Caribbean Sandals deal struck at $6bn valuation with Morgan Stanley backing

The Royal Caribbean Sandals deal is now official: Royal Caribbean Group has agreed to acquire a 50% equity stake in Sandals Resorts for $3 billion, the companies announced on Wednesday. The transaction values the Caribbean resort chain at $6 billion in total.

To fund the purchase, Royal Caribbean secured debt financing from Morgan Stanley, according to Yahoo Finance. The deal is expected to complete in early 2027, which is a later timeline than the “early next year” the companies referenced in their initial announcement.

Why the Royal Caribbean Sandals deal matters for holidaymakers

For anyone planning a Caribbean holiday, the deal could reshape how cruise and resort bookings are bundled together. Sandals and its Beaches brand operate more than a dozen properties across the Caribbean, offering all-inclusive packages that have traditionally been entirely separate from the cruise market.

Royal Caribbean has been working to broaden its business beyond ocean cruises, building what it describes as a wider holidays company rather than purely a cruise operator. The company already runs several private destinations for its cruise passengers, but bringing Sandals into its orbit gives it a direct presence in the land-based, all-inclusive market for the first time at scale.

All-inclusive resorts work on a straightforward principle: guests pay one upfront price that covers their room, meals, drinks and most activities. Sandals pioneered that model in the Caribbean, and its Beaches brand extends the same concept to family holidays. Together, the two brands give Royal Caribbean access to a well-established customer base that may never have considered a cruise.

Royal Caribbean’s stock and the push for diversification

The timing of the announcement comes after a difficult period for Royal Caribbean’s share price. The stock is down roughly 25% over the past year, after the company trimmed its forecasts for revenue growth, citing softer demand for European sailings.

The move into land-based resorts is a direct response to that pressure. By acquiring a stake in Sandals, Royal Caribbean is positioning itself to capture holiday spending that does not depend on the demand patterns of ocean cruising. A family booking a week at a Sandals resort in Jamaica, for instance, represents revenue entirely separate from any cruise itinerary.

The Financial Times and CNBC had earlier reported that the two companies were in talks, so the Wednesday announcement confirmed what the market had been anticipating for some time. With Morgan Stanley providing the debt financing, the structure of the deal suggests Royal Caribbean is comfortable taking on leverage to accelerate its diversification strategy.

For Sandals, the arrangement brings the resources of a large publicly listed company without requiring a full sale. A 50-50 equity split means Sandals retains equal ownership and, presumably, a continued say in how the brand is run. The $6 billion valuation places Sandals firmly among the more valuable private hospitality businesses in the Caribbean region.

What the deal does not do, at least not immediately, is change anything for guests already booked at either a Sandals property or on a Royal Caribbean sailing. Deals of this size typically take months to move through regulatory approvals and financing arrangements before any operational changes flow through to the customer.

The transaction is expected to close in early 2027, according to Yahoo Finance, giving both companies the better part of a year to prepare for integration planning while continuing to operate independently.